Question

At January 1, 2020, QWS Company had plan assets of $278,000 and a projected benefit obligation of the same amount. During 2020, service cost was $28,200, the settlement rate was 10%, actual and expected return on plan assets were $26,100, contributions were $20,200, and benefits paid were $17,700. Prepare a pension worksheet for QWS Company for 2020. QWS COMPANY General Journal Entries Memo Record Items Pension Expense Cash Pension Asset/Liability Projected Benefit Obligation Plan Assets 1/1/20 Service cost Interest cost Actual return Contributions Benefits Journal entry, 12/31/20 Balance, 12/31/20

Answer 1

QWS Company
Items	Pension Expense	Cash	Pension Asset / Liability	Projected Benefit Obligation	Plan Assets
1/1/2020				278000	278000
Servcei Cost	28200			28200
Interest Cost	1700			27800	26100
Actual Return					26100
Contributions		-20200			20200
Benefits Paid		-17700		-17700	-17700
Balance 31/12/2020	29900	-37900	16400	316300	332700

Journal Entry
Date	Accounting Description	Dr.	Cr.
31/12/2020	Employee Benefit A/c Dr.	29900
	To Service Cost A/c		28200
	To Interest Cost A/c		1700
	( Being Employee Benefit expenses charged to P and L A/c)
31/12/2020	Plan Assets A/c Dr.	20200
	To Contribution Paid A/c		20200
	( Being Contributed to pLan)
31/12/2020	Contribution Paid A/c	20200
	To Bank A/c		20200
	( Being Contribution paid)
31/12/2020	Projected Benefit Obligation A/c Dr.	17700
	To Plan Assets A/c		17700
	( Being Benefit Paid out of Plan Assets)
31/12/2020	Benefit Apid A/c Dr.	17700
	To Bank A/c		17700
	( Beong Benefit Paid to Employees)
31/12/2020	Plan Assets A/c	26100
	To Actual Return A/c		26100
	( Being Actual Return on Plan Assets)
31/12/2020	Actual Return A/c Dr.	26100
	To OCI		26100
	( Actual Return Transferred to OCI)